Supreme Court delays decision whether to take up lawsuit

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WASHINGTON (CNN) -- A settlement "may be imminent" in a lawsuit brought against the government by former Energy Department nuclear scientist Wen Ho Lee, according to his lawyers.

The word of a possible settlement came in a filing to the U.S. Supreme Court, which five reporters are asking to intervene in their refusal to reveal sources in the FBI probe of Lee, who was investigated and later cleared of espionage involving missing nuclear research files.

The scientist claims officials anonymously leaked damaging information about him to the press during the probe in 1999. He later filed suit, seeking damages against the government.

Lee attorney Brian Sun told the Supreme Court in a recent letter to the clerk "that there have been recent settlement discussions with the government in the underlying case, that resolution of the entire case may be imminent, but that there is not yet a final agreement."

Calls to Sun's office in Los Angeles, California, and the Justice Department were not immediately returned.

The Supreme Court put off consideration of the reporters' appeal Monday, apparently because of the negotiations between Lee and the Justice Department.

Reporters' privileges

If the civil case is settled, the larger constitutional questions before court would be left unresolved.

At issue is what First Amendment privilege journalists may have, if any, to reject subpoenas in civil lawsuits demanding they reveal their sources of reporting.

If if does move forward, the case could serve to clarify conflicting legal standards over how the press deals with sensitive information it obtains.

Among the reporters fighting the subpoenas is Pierre Thomas, who was CNN's justice correspondent in 1999.

Thomas reported extensively on the government probe of Lee, a onetime Energy Department scientist who worked at the federal nuclear research facility in Los Alamos, New Mexico.

Government officials, including then-Energy Secretary Bill Richardson, publicly named Lee as a target of a probe into the alleged theft of highly secret documents from the lab, and investigators suspected he was spying for China.

Lee was later cleared of espionage and nearly all the other serious charges.

After his release from prison, Lee sued the government under the Privacy Act, alleging officials leaked false and incriminating information to several reporters, including Thomas, who now works at ABC News.

Thomas and four other reporters were subpoenaed in 2002, and a federal district court ordered them to testify or face contempt charges.

A federal appeals court upheld the subpoenas against Thomas, James Risen of the New York Times, Bob Drogin of the Los Angeles Times, and H. Josef Hebert of The Associated Press. A similar subpoena against Jeff Gerth of the New York Times was dismissed.

In its ruling, the appeals court noted Thomas "refused to reveal the names or employers of the sources who gave information about the progress of the FBI investigation into Lee."

It concluded, "This evidence is plainly sufficient to support the district court's holding of contempt."

Thomas and CNN then decided to file a separate appeal with the Supreme Court.

In a brief for CNN and Thomas, attorney Theodore Olson said the case "comes at a time when an unprecedented number of reporters face subpoenas demanding they reveal their confidential sources under penalty of fines or imprisonment."

Lee's attorney, Sun, said private citizens have a right to defend their good name from government officials who would hide behind a shield of anonymity.

"We do not consider this to be any type of assault on the First Amendment but rather seeking justice on behalf of Dr. Lee," he said earlier this year. "We believe he is entitled to this information under the law."

In a brief filed with the Supreme Court, Lee's lawyers argue that under the federal Privacy Act, "Reporters are not and should not be empowered to extinguish the protections that Congress provided the nation's citizens by means of a de facto immunity to be conferred on government leaders by reporters through an unpierceable promise of confidentiality."

Free press advocates have rallied behind the reporters, fearing a "chilling effect" in the future on officials who want to inform the public about government wrongdoing.

This case is different from the high-profile investigation into whether White House officials deliberately leaked the identity of CIA agent Valerie Plame to reporters.

In that case, the government has indicted former top White House aide Lewis "Scooter" Libby. Other indictments may be pending.

The federal investigation seeks to learn whether Plame's secret identity was revealed as retaliation to discredit Plame's husband, former Ambassador Joseph Wilson, who publicly disputed evidence the administration used to go to war with Iraq.

Unlike that criminal probe, Lee's case is a civil lawsuit brought by a private citizen and involves whether he has the right to learn what officials might have told reporters.

Lee is a 66-year-old Taiwan-born U.S. citizen who now lives near Sacramento, California.

He was indicted in late 1999 on 59 counts of stealing nuclear weapons data from the Los Alamos facility. He was jailed, denied bail, placed in solitary confinement and labeled a national security threat.

Months later, he walked free on time served after the government's case collapsed. All but one count was dismissed, and Lee pleaded guilty to mishandling classified material, a felony.

The federal judge overseeing the case sharply criticized the prosecution's case, in particular "top decision makers in the executive branch ... who have embarrassed our entire nation and each of us who is a citizen."

Then-President Clinton issued a public apology to Lee over his treatment.

Three-decade-old federal rules of evidence have extended the privilege of confidentiality -- in some cases -- to spouses, to priests and other clerics, to psychologists and psychiatrists, and to journalists.

Most states differ from the federal government over whether the press has clear, consistent statutory protection. Many state and federal courts have been at odds over the issue as well.